SEC Pays Settlement to Resolve Former Investigators Firing Claims

(Bloomberg) -- The Securities and Exchange Commission has paid $580,000 to settle claims by a former internal watchdog that he was fired in an effort to quash his investigations.

David Weber, who was terminated late last year from his job as chief investigator in the SEC inspector generals office, will also have his personnel records revised to show he was an employee in good standing and resigned voluntarily. The settlement was announced by Cary Hansel, Webers attorney at Joseph, Greenwald & Laake in Greenbelt, Maryland.

The resolution puts a capstone on a troubled period at the SECs internal investigation unit. Shortly after his hiring last year, Weber reported allegations of unethical conduct by recently departed Inspector General H. David Kotz. Some of the offices employees then complained that Weber illegally carried a gun while on duty.

Weber, who said he had a properly licensed firearm in his car, sued the SEC in November, arguing that he was terminated as part of a campaign to cover up the potential wrongdoing he had been investigating. The court papers contained extensive details about Webers probes, including one reviewing whether the agency mishandled sensitive data from stock exchanges.

We have obtained justice for Mr. Weber, but that is only the beginning, said Hansel, who urged further investigation of the allegations Weber raised in the lawsuit. This entire affair started when the SEC sought to silence Mr. Weber and bury the concerns he raised.

Important Work

The settlement resolves the matter to everyones satisfaction and permits the Office of the Inspector General to continue focus on its important work, John Nester, an SEC spokesman, said in a statement.

The payment is one of the highest the SEC has paid in a whistleblower retaliation settlement, Hansel said.

The agency paid $755,000 in 2010 to Gary Aguirre, a former enforcement lawyer who said he was unjustly fired for trying to investigate insider-trading allegations involving former Morgan Stanley Chief Executive Officer John Mack. The SEC closed its probe of Mack in 2006 without allegations of wrongdoing.

Webers original complaints in March 2012 prompted the SEC to bring in David Williams, the inspector general of the U.S. Postal Service, to conduct a review. Williams concluded that Kotz violated ethics rules by overseeing probes that involved people with whom he had personal relationships. Kotz had quit in January 2012 amid questions about his conduct.

Williams concluded there wasnt any evidence that Webers actions were improper or raised security concerns.